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Annexation Feasibility Study

Olympus Hills

May 2014

Boundary Commission | Olympus Hills Annexation Feasibility Study - DRAFT

Zions Bank Public Finance | May 2014

Contents

Chapter 1: Executive Summary ................................................................................................ 2

Chapter 2: Population and Population Density .......................................................................... 3

Chapter 3: Geography, Geology, Topography, and Boundaries ................................................. 5

Chapter 4: Elimination or Creation of Unicorporated Island or Peninsula .................................... 8

Chapter 5: Prevention of Future Logical and Beneficial Incorporation or Annexation ................... 9

Chapter 6: Fiscal Impact on Unincorporated Areas, Other Municipalities, Local Districts, Special

Service Districts, School Districts, and Other Governmental Entities ........................12

Chapter 7: Current and Five-Year Projections: Demgraphics and Economic Base .....................20

Chapter 8: Five-Year Projected Growth in the Study Area and Adjacent Areas ..........................23

Chapter 9: Present and Five-Year Cost Projections ..................................................................24

Chapter 10: Projected City Revenues ........................................................................................32

Chapter 11: Projected Tax Impacts ...........................................................................................39

Chapter 12: Past Expansion in Terms of Population and Construction ........................................42

Chapter 13: Extension of Nearby Municipal Boundaries .............................................................43

Chapter 14: History, Culture, and Social Aspects of the Proposed Annexation Area and

Surrounding Area ...................................................................................................44

Chapter 15: Service Provision....................................................................................................46

Chapter 16: Impact on School Districts .....................................................................................47

Appendix A: Percent Revenues to Expenditures……………………………………………..………48

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Executive Summary

Utah Code 10-2-413(2)(b): submit with the full written results of the feasibility study a summary of the results no longer than a page in length;

The proposed annexation area, also referred to as “Olympus Hills,” is located in the northeastern portion of Salt Lake County near the mouth of Millcreek Canyon. It is bounded on the north and east by Unincorporated Salt Lake County and the City of Holladay on the south and west. The estimated population in Olympus Hills is 3,660 residents with employment of 24 persons. This area is primarily residential with a convenience store, gas station and a few personal and professional service businesses. There is limited potential for growth in Olympus Hills. The proposed annexation does not eliminate, leave or create an unincorporated island or unincorporated peninsula. Of the bordering cities, only South Salt Lake and Salt Lake City – in addition to the City of Holladay, have annexation plans that include Olympus Hills. The Unified Police Department currently provides police services to Olympus Hills. If Olympus Hills annexes into the City of Holladay, there will be a net negative impact to the UPD of $26,460. The Unified Fire Authority currently provides fire services to Olympus Hills. If Olympus Hills annexes into the City of Holladay, there will be no negative impact to the Unified Fire Authority. Salt Lake County currently provides municipal type services to the Olympus Hills area funded through the Salt Lake County Municipal Services Fund. Assuming Olympus Hills annexes into the City of Holladay, there will be an estimated net negative impact of $173,340 to the Salt Lake County Municipal Services Fund. The Municipal Services Fund is funded primarily through sales tax revenue rather than property taxes. Therefore, the reduced revenues as a result of the annexation would need to be recouped through an increase in sales tax revenue or a budget reduction of approximately 0.37 percent. The Tort Liability Fund will have an estimated net negative impact of $17,100.1 The Class B Road Fund will have a net negative impact of $119,684. If Olympus Hills annexes into the City of Holladay, tax impacts to Holladay City residents range from approximately $1.71 to $5.67 per $100,000 of primary residential value annually over the next five years. The tax impact per $100,000 for non-primary residential and commercial value ranges from approximately $3.10 to $10.30 over the next five years. If annexation occurs, Olympus Hills residents will pay approximately $264 in the City of Holladay property taxes compared to $684 in the Unincorporated County. Residents in the proposed annexation area will also pay franchise taxes of approximately $188 per household and their portion of the estimated UFSA lease revenue bond of approximately $52 per household.2 The total impact for residents in the proposed annexation area is an estimated $180 reduction in overall municipal tax burden if annexation occurs for a home with a median value of $276,000. From the results of the Feasibility Study, it appears that the average amount of revenue does not exceed the average amount of expenditures by more than five percent pursuant to Utah Code 10-2-416-(3).

1 The tort liability tax rate would need to increase approximately 0.000024 in order to recoup the $17,100 lost revenues from the Olympus Hills area. This equates to $0.13 per $100,000 home value and $0.24 per $100,000 of taxable commercial value. 2 17B-1-511

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Population and Population Density

Utah Code 10-2-413(3)(i): the population and population density within the area proposed for annexation, the surrounding unincorporated area, and, if a protest was filed by a municipality with boundaries within ½ mile of the area proposed for annexation, that municipality;

The proposed annexation area is located in the northeastern portion of Salt Lake County near the mouth of Millcreek Canyon. It is bordered by I-215 on the east, 2700 East on the west, 3900 South on the north and 4430 South (turns into 4500 South) on the south. This area is also referred to as the “Olympus Hills” neighborhood.

FIGURE 1 – PROPOSED ANNEXATION AREA

The estimated population in Olympus Hills is 3,660 residents and the estimated population in the surrounding unincorporated area is 60,707. These population estimates are based on 2010 Census data and subsequent growth. Growth from 2010 to present was projected using building permit activity in the proposed annexation area and ACS data for the surrounding unincorporated area. Based on information provided by the Salt Lake County Planning and Development

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Department, three residential building permits were issued in the Olympus Hills area between 2011 and 2013. Two of the permits were for single family residential construction and one permit was issued for a single family residential re-build. There is limited potential for growth in Olympus Hills as there is only one undeveloped lot in the area which is currently owned by an institution and zoned residential. There is no projected development on this lot over the next five years. Growth in the surrounding unincorporated area was based on the average annual historical growth in Millcreek of approximately 0.34 percent.3 There are approximately 0.69 square miles in Olympus Hills and 11.96 square miles in the surrounding unincorporated area. The population density of 5,297 persons per square mile in Olympus Hills is slightly higher, but very similar to the population density of 5,076 persons per square mile in the surrounding unincorporated area. TABLE 1: POPULATION AND POPULATION DENSITY

Olympus Hills Surrounding Unincorporated

2010 2014 2010 2014

Population 3,655 3,660 59,886 60,707

Households 1,355 1,357 23,033 23,349

Square Miles 0.69 0.69 11.96 11.96

Population Density (per sq mile) 5,297 5,304 5,007 5,076

3 ACS three year data, historical building permit data

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Geography, Geology, Topography, and Boundaries

Utah Code 10-2-413(3)(ii): the geography, geology, and topography of and natural boundaries within the area proposed for annexation, the surrounding unincorporated area, and, if a protest was filed by a municipality with boundaries within ½ mile of the area proposed for annexation, that municipality;

Geography

The proposed annexation area of Olympus Hills encompasses approximately 436 acres or 0.69 square miles. The surrounding unincorporated area, outlined in yellow in figure 2, encompasses approximately 7,653 acres or 11.96 square miles. Olympus Hills is situated on the hillside, close to the mouth of Millcreek Canyon. The surrounding unincorporated area includes the Millcreek Canyon watershed, which is geographically a part of the Mount Olympus Community.

FIGURE 2 – PROPOSED ANNEXATION AREA GEOGRAPHY

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Geology

The proposed annexation area and surrounding unincorporated area includes canyon, foothill and valley areas. The soils of the Olympus Hills area, located on the hillside of Millcreek Canyon, and the valley areas of the surrounding unincorporated area consist of course and fine sandy loam, gravelly loam, loam and mixtures of silt and clay loam. The areas of the surrounding unincorporated county located closer to the canyon generally consist of gravelly loam, loam or very cobbly loam soils.4 Topography

The topography of the proposed annexation area includes hills sloped at approximately six percent. The topography of the surrounding unincorporated area ranges from a zero percent slope in the valley to 15+ percent in Mount Olympus. The slopes in Millcreek Canyon east of Mount Olympus range as high as 80 percent. The elevation of the surrounding unincorporated area ranges from 4,500 to 9,500 feet above sea level in Millcreek Canyon.

FIGURE 3 – PROPOSED ANNEXATION AREA TOPOGRAPHY

4 Utah Automated Geographic Reference Center, Natural Resources Conservation Service, National Cooperative Soil Survey

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Natural Boundaries

The proposed annexation area is bounded on the north and east by Unincorporated Salt Lake County and the City of Holladay on the south and west. The surrounding unincorporated area shares its boundary with Salt Lake City and South Salt Lake on the north. The southern portion of the boundary is shared with Murray City and Holladay City. A small portion of the southern border is shared with Taylorsville City and the western tip of the surrounding unincorporated area touches West Valley. The eastern portion of the surrounding unincorporated area follows the ridge line separating Salt Lake County from Summit County, covering the entire Mill Creek watershed. For this feasibility study, we have used the Mount Olympus area as the eastern border of the “surrounding unincorporated area.”

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Elimination or Creation of Unincorporated Island or Peninsula

Utah Code 10-2-413(3)(iii): whether the proposed annexation eliminates, leaves, or creates an unincorporated island or unincorporated peninsula;

The proposed annexation does not eliminate, leave or create an unincorporated island or unincorporated peninsula.

FIGURE 4 – PROPOSED ANNEXATION AREA

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Prevention of Future Logical and Beneficial Incorporation or Annexation

Utah Code 10-2-413(3)(iv): whether the proposed annexation will hinder or prevent a future and more logical and beneficial annexation or a future logical and beneficial incorporation;

The analysis of other potential incorporation and annexation scenarios is based on the following criteria:

Visual inspection of boundaries or geographic constraints; Ability to provide services; Interest of surrounding municipalities to annex the area; and Possible future incorporation

Visual Inspection The proposed annexation area shares borders with the City of Holladay and Unincorporated Salt Lake County. Service Provision Many of the service providers that currently provide services to the proposed annexation area will continue to provide services if Olympus Hills annexes into Holladay City. Holladay City will provide the municipal type services to the proposed annexation area that are currently provided by the Unincorporated County. Willingness of Surrounding Areas to Annex the Area The cities bordering the unincorporated area surrounding Olympus Hills include Murray, Salt Lake, South Salt Lake, West Valley, Taylorsville and Holladay (the annexing City). Of the bordering cities, only South Salt Lake, Salt Lake City, (in additional to Holladay City), include Olympus Hills in their annexation plans/studies. TABLE 2: ANNEXATION PLANS

City Annexation Plan Includes Olympus Hills South Salt Lake City Yes Salt Lake City Yes Murray No West Valley City No Taylorsville No South Salt Lake South Salt Lake City’s annexation plan is included in its 2009 General Plan. One of the annexation goals states, “Consider annexation of any or all of Millcreek Township of unincorporated Salt Lake County.” Policies related to potential annexation of Millcreek Township include the following:

Produce a report that will describe how current process works, what is needed, and the cost and benefits of annexation to the City;

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Produce an annexation plan for South Salt Lake City; Maintain relationships with citizen groups active in the Millcreek Township; and Consider all annexation proposals from citizens of the Millcreek Township.

Salt Lake City In 1979, Salt Lake City prepared a Master Annexation Policy Declaration that included the intent to annex the portion of Salt Lake County served by the City’s water system, which includes the proposed annexation area. In 2000, the Salt Lake City Council commissioned an independent study that concluded annexation would produce long-term benefits for County residents if annexed into the City through:

Improved levels of water service; A net reduction in the cost of water service; and Annexation would not significantly increase water rates currently paid by City residents.

Murray Murray City’s most recent annexation plan was completed in 1999. The plan is a “comprehensive look ahead at most of the potential incorporations and annexations on the horizon.” Areas included in this fiscal impact analysis (some of which have since incorporated or been annexed) include Millcreek Township, South Cottonwood, Magna, Kearns, Granite, and Knudson’s Corner. Murray’s annexation plan includes the western portions of the Millcreek Township, but excludes the proposed annexation area. West Valley City The annexation section of the West Valley General Plan, 2009 states, “There are essentially two future expansion areas remaining from the 1996 (Annexation Police Plan Declaration) map:

Between SR-201 and 6600 South from the western boundary of the City to the western Salt Lake County line which includes the Magna Township and;

Kearns Township.” Taylorsville The annexation section of the Taylorsville General Plan 2006 states, “If petitioned by the Kearns community, adopt an annexation evaluation system that identifies the “net” benefits of annexation and require the City staff or their designees to provide an analysis for all annexation applications that identifies the potential benefits and liabilities of the proposed annexation.” Land use and annexation goals for Taylorsville City include:

Achieve efficient use of land and public infrastructure and promote economic sustainability through the use of a coordinated and deliberate land use strategy;

Coordinate land use implementation tools with the intent and spirit of the Taylorsville General Plan;

Provide an appropriate level of future planning to areas of the community that warrant a greater level of analysis; and

Be prepared to address and assess possible benefits and liabilities of future annexation petitions to the City of Taylorsville.

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Requests were sent to each of the cities with annexation plans that include the Olympus Hills area to inquire of their willingness to annex the Olympus Hills area. None of the cities have responded to the request.

Possible Future Incorporation An incorporation feasibility study for Millcreek Township was conducted in 2011 and concluded the incorporation of Millcreek Township was feasible. The proposed incorporation was put on the ballot and voted down by residents. A group of Millcreek residents who are proponents of incorporation have recently begun gathering signatures on an incorporation petition. On February 21, 2014 Salt Lake County received a Request for a Feasibility Study from residents in the Millcreek Township. This Request was reviewed by the County Clerk’s Office and certified. However, with the recent passage of SB216 the boundaries of existing townships in unincorporated County (with a handful of exceptions listed in the bill) are frozen until November 2015. The bill requires the County to establish an advisory committee with representation from all the unincorporated areas to study issues of governance, service delivery, and taxation.

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Fiscal Impact on Unincorporated Areas, Other Municipalities, Local Districts, Special Service Districts, School Districts, and Other Governmental Entities

Utah Code 10-2-413(3)(v): the fiscal impact of the proposed annexation on the remaining unincorporated area, other municipalities, local districts, special service districts, school districts, and other governmental entities;

The following entities provide services to the proposed annexation area which is currently a part of Tax District 17. TABLE 3: SERVICE PROVIDERS

Service Provider Police Unified Police Department Fire Unified Fire Authority Public Works, Planning, Judicial, etc. Salt Lake County Municipal Services Water Retailers Salt Lake City Public Utilities Water Wholesalers Central Utah Water Conservancy District Sewer Mt. Olympus Improvement District Waste & Recycling Wasatch Front Waste & Recycling District Roads State Roads – 4500 South Electricity Rocky Mountain Power Gas Questar Gas Mosquito Abatement Salt Lake City Mosquito Abatement District Libraries Salt Lake County Schools Granite School District Parks Salt Lake County Police

The Unified Police Department (UPD) provides law enforcement services to the unincorporated areas of the County area as well as several incorporated cities including Herriman, Midvale, Riverton, Taylorsville and Holladay. Police services will continue to be provided by the UPD if Olympus Hills annexes into Holladay City. Revenues to the UPD include tax revenues from members of the Salt Lake Valley Law Enforcement Service Area (unincorporated areas of the County, Herriman and Riverton) as well as revenues from the member cities of Holladay, Midvale, and Taylorsville. Based on the current SLVLESA property tax rate of 0.00223 and a taxable value of $203,876,116 – SLVLESA is currently receiving $454,644 in revenues from the proposed annexation area. TABLE 4: SLVLESA PROPERTY TAX REVENUE – OLYMPUS HILLS

Taxable Value Annexation Area

SLVLESA Tax Rate SLVLESA Revenue Olympus Hills

$203,876,116 0.00223 $454,644

Utah Code requires service levels to be matched to the service level currently provided by the annexing City.5 The current level of police services in the City of Holladay is 1.02 officers per 1,000 population. The 2014 population in the proposed annexation area is 3,660 which results in a

5 Utah Code 10-2-413(3)(c)

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transfer of four FTE’s to the City of Holladay.6 Three of the four FTE’s are dedicated officers and one FTE is for pooled services which include SWAT, forensics, dispatch, investigations, etc. The total cost to the City of Holladay for the four FTE’s that will service Olympus Hills is $428,184. TABLE 5: POLICE SERVICE COSTS

Description FTE’s Cost per FTE Total Cost Dedicated Officers 3 $100,920 $302,760 Pooled Officer 1 $125,424 $125,424 Total Cost $428,184 Officers per 1,000 in the unincorporated areas of the County are slightly higher at 1.13 compared to 1.02 officers per 1,000 in the City of Holladay.7 Therefore, the total cost to Holladay City to provide police services in Olympus Hills is slightly lower compared to the amount of tax revenue currently received by SLVLESA in the proposed annexation area. 8 If annexation occurs, there will be a negative impact to SLVLESA of $26,460. TABLE 6: SLVLESA BUDGET

SLVLESA Tax Revenue Olympus Hills

Holladay Cost Olympus Hills SLVESA Impact

$454,644 $428,184 -$26,460 Fire

The Unified Fire Authority (UFA) provides fire protection and prevention as well as emergency medical services to over 425,000 residents in the cities of Alta, Cottonwood Heights, Draper, Herriman, Holladay, Riverton, Taylorsville, Eagle Mountain and the unincorporated areas of the County. Since the City of Holladay is a member entity of UFA for fire services, there will be no change in the fire service provider if Olympus Hills annexes into the City of Holladay. Similar to the UPD, the UFA receives member fees from Unified Fire Service Area (UFSA) and other member cities that are regular members with the UFA. Based on the current UFSA tax rate of 0.002192 and a taxable value of $203,876,116 in the proposed annexation area, UFSA is currently receiving $446,897 in revenues from the proposed annexation area. TABLE 7: UFSA PROPERTY TAX REVENUE – OLYMPUS HILLS

Taxable Value Annexation Area

UFSA Tax Rate UFSA Revenue

Olympus Hills $203,876,116 0.002192 $446,896 In order to provide fire services to the proposed annexation area, the City of Holladay will need one additional firefighter over a 24-hour period. One additional firefighter per 24-hour shift is equivalent to 3.5 FTE’s. The total cost per FTE for UFA fire service personnel is $118,960,9 for a total cost of $416,360 for 3.5 FTE’s. UFA apparatus fees are charged on a pro rata basis. If Olympus Hills annexes into the City of Holladay, the additional apparatus charge to the City of Holladay is

6 (3,660/1,000)*1.02 = 3.73 7 Assuming 4 FTE’s are transferred to the City of Holladay to service the proposed annexation area, the officers per 1,000 in the proposed annexation area is 1.09. 8 Assuming 1.13 officers per 1,000 the total police FTE’s in the proposed annexation area would be 4.13. 9 Source: UFA

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$20,758. The total additional fire service cost to the City of Holladay is $437,118. The difference between property tax revenue the UFSA is currently receiving from Olympus Hills and the revenue from the City of Holladay is $9,778. TABLE 8: UFSA IMPACT

UFSA Tax Revenue Olympus Hills

Holladay Cost Olympus Hills

UFSA Impact

$446,896 $437,118 -$9,778 If Olympus Hills annexes into the City of Holladay, it would be responsible for its portion of the $32,950,000 lease revenue bond issued in 2008 for new fire stations. The Olympus Hills estimated annual portion of the bond payment is $69,905 or approximately $51.51 per household. 10 TABLE 9: FIRE SERVICE COSTS

Description Amount Firefighter Costs $416,360 Apparatus Charge $20,758 Estimated Bond Payment $69,905 Total Fire Service Costs $507,023 Salt Lake County Municipal Services

Salt Lake County provides municipal-type services including public works, planning & zoning, engineering, business licensing, justice court, etc. to the unincorporated portions of the County through the Municipal Services Fund. Sales tax revenue comprises the majority of the revenue for this fund. Assuming Olympus Hills annexes into the City of Holladay, Municipal Services Fund revenues and expenditures will be impacted. The impact to Municipal Services Fund 230 is a net projected reduction in available funds of approximately $173,340. This impact is a combination of a decrease in revenues and a decrease in expenditures. A more detailed explanation of the impacts to Municipal Services Fund 230 is included following this summary. TABLE 10: MUNICIPAL SERVICES FUND 230

Tax Funds - Other Beginning Balance11

Other Revenue

Transfer In

Total Available

Budget Transfer Out

Ending Balance

230 - Current Municipal Services Fund

$6,807,000 $41,775,669 $2,100,912 $50,683,581 $46,946,156 $369,673 $3,367,752

With Proposed Annexation

$6,807,000 $41,566,866 $2,100,912 $50,474,778 $46,910,693 $369,673 $3,194,412

Difference -$173,340

The Tort Liability Fund will also be impacted if Olympus Hills annexes into the City of Holladay. Tort Liability Fund revenues, which include tort liability and motor vehicle-fee-in-lieu revenues, will be reduced by approximately $17,100.12 There is no reduction in tort liability expenditures.13

10 This is an estimated payment amount based on 2013 bond payments and the taxable value in the proposed annexation area. Utah Code17B-1-511 11 The distribution of a portion of the Municipal Services Fund that represents the tax contribution of an area of the unincorporated county that annexes into a municipality is not regulated by Utah Code. However, a portion of the beginning balance may be distributed to Holladay City if annexation occurs. 12 Source: Salt Lake County

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TABLE 11: TORT LIABILITY FUND 232

Tax Funds - Other Beginning

Balance Tax

Revenue Other

Revenue Total

Available Budget

Transfer Out

Ending Balance

232 - Municipal Services - Tort Liability

$2,425,000 $757,000 $32,000 $3,214,000 $302,000 $0 $2,912,000

With Proposed Annexation $2,425,000 $740,600 $31,300 $3,196,900 $302,000 $0 $2,894,900

Difference

-$17,100

The Class B Road Fund revenues will be reduced by the amount of Class B Road Fund distributions allocated to the proposed annexation area of $119,684.14 TABLE 12: CLASS B ROAD FUND

Other Governmental Funds

Beginning Balance

Other Revenue

Total Available Budget Ending

Balance

270 - Class B & Collector Road Funds $2,758,000 $8,635,008 $11,393,008 $10,744,641 $648,367 With Proposed Annexation $2,758,000 $8,515,174 $11,273,174 $10,744,491 $528,683

Difference

-$119,684

The total impact to funds 230, 232 and 270 is a net reduction in the ending balance of $310,124. Table 13 shows the impact to Municipal Services Fund revenues assuming Olympus Hills annexes into the City of Holladay. Revenues to the Municipal Services Fund are projected to decrease approximately 0.4 percent or $208,803 if Olympus Hills annexes into the City of Holladay. TABLE 13: MUNICIPAL SERVICES FUND 230 - REVENUES

Municipal Services Fund 230 Current With Annexation

Olympus Hills Difference

1015 - Office of Township Services $0 $0 $0

4050 - Planning & Development Services $2,638,389 $2,618,115 -$20,274

4100 - Animal Services $2,925,916 $2,940,116 $14,200

4250 - Street Lighting $32,680 $30,550 -$2,130

4400 - Public Works Operations $8,828,720 $9,021,158 $192,438

4500 - Public Works Engineering $648,500 $648,500 $0

5020 - Municipal Services - Statutory & General $31,860,000 $31,498,864 -$361,136 5600 - Municipal Services - Capital Improvements $548,464 $548,464 $0

8500 - Justice Courts $1,100,000 $1,068,100 -$31,900

9115 - Sheriff Law Enforcement $0 $0 $0

Total $48,582,669 $48,373,866 -$208,803

The following explains the assumptions and calculations for the revenue impacts to each department:

13 Source: Salt Lake County; Tort liability revenue reduction of $16,400 and Motor Vehicle-Fee-In-Lieu revenues of approximately $700. 14 Based on 13 paved road miles in the annexation area and a per population distribution of $22.28 and a weighted road mile distribution of $586.75. This fund may also be reduced by less than $200 for any shared signal costs.

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Planning and Development Services – Revenues are reduced based on the current business license fees and estimated per household building/planning fee revenues. Animal Services – The City of Holladay contracts for animal services with the Salt Lake County Animal Services Department. Animal Services Department revenues are increased based on the projected increase in the City of Holladay Animal Services contract amount to service the Olympus Hills area. Street Lighting – If annexation occurs, power costs for the street lights, signals and flashers in the proposed annexation area, which are currently paid for with County Municipal Funds, will be paid for by the City of Holladay. Therefore, if annexation occurs, the amount of Municipal Funds requested to pay for street lights, signals and flashers in the unincorporated areas will be reduced by the amount equal to the power costs for street lights, signals and flashers in the proposed annexation area. Public Works Operations – The City of Holladay contracts with the Salt Lake County Public Works Department for snow removal, sign maintenance, overlay, etc. Additional revenues to the Public Works Operations reflect the projected increase in the City’s contract amount to provide public works services to the Olympus Hills area. Public Works Engineering - The Public Works Engineering Department does not project any impact to its budget if Olympus Hills annexes into the City of Holladay. Statutory & General – The Statutory & General Fund includes sales tax, franchise and E911 surcharge revenues. The reduction in sales tax revenues was based on the 2013 per capita distribution of $86.04 and estimated POS revenue of approximately $6,500.15 The reduction in revenues from franchise fees was provided by the County and the E911 surcharge is based on the number of households in the proposed annexation area. Capital Improvements – Revenues to the capital improvements fund will not be impacted by the proposed Olympus Hills annexation.16 Justice Courts – Justice Court revenue is reduced based on the two-year average number of traffic tickets and criminal citations issued in the proposed annexation area. TABLE 14: JUSTICE COURT REVENUE – OLYMPUS HILLS

Description Amount Fines Total Traffic Citations 198 $90 $17,820 Criminal Citations 22 $640 $14,080 Projected Fines Revenue 220 $31,900 The following table shows the impact to Municipal Services Fund expenditures assuming Olympus Hills annexes into the City of Holladay for the Salt Lake County Municipal Services Fund 230. Expenditures to the Municipal Services Fund are projected to decrease approximately 0.08 percent or $35,463 if Olympus Hills annexes into the City of Holladay. TABLE 15: MUNICIPAL SERVICES FUND 230 - EXPENDITURES

15 Source: State Tax Commission 16 Includes revenues from deferred impact fees and other projects outside of the Olympus Hills area.

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Municipal Services Fund 230 Current With Olympus Hills Annexation

Difference

1015 - Office of Township Services $1,114,766 $1,114,766 $0 4050 - Planning & Development Services $5,273,028 $5,273,028 $0 4100 - Animal Services $5,424,859 $5,424,859 $0 4250 - Street Lighting $444,485 $442,355 -$2,130 4400 - Public Works Operations $18,677,611 $18,677,611 $0 4500 - Public Works Engineering $2,127,395 $2,127,395 $0 5020 - Municipal Services - Statutory & General $3,593,947 $3,593,947 $0 5600 - Municipal Services - Capital Improvements $8,678,609 $8,645,276 -$33,333 8500 - Justice Courts $1,557,406 $1,557,406 $0 9115 – Sheriff Law Enforcement $54,050 $54,050 $0 Total $46,946,156 $46,910,693 -$35,463 The following explains the assumptions and calculations for the impacts to Municipal Services Fund expenditures: Office of Township Services – If Olympus Hills annexes into the City of Holladay, there is no impact to the Township Services budget. Planning & Development Services – The Planning & Development Services Department has indicated that while revenues will decrease slightly, there will not be a large enough impact on work load to reduce personnel and department overhead expenditures. Therefore, expenditures will not be impacted by the proposed annexation. Animal Services – Animal Services expenditures will remain the same as the City of Holladay contracts with the County for animal services. Street Lighting - Street lighting expenditures will be reduced equal to the amount of the power costs for street lights in the proposed annexation area. Public Works Operations – Public Works Operations expenditures will remain the same as the City of Holladay contracts with the County for public works services. Public Works Engineering – There is no impact to the Public Works Engineering budget assuming Olympus Hills annexes into the City of Holladay. Statutory & General – There is no reduction in expenditures for the Statutory and General Department as a result of the proposed annexation of Olympus Hills into the City of Holladay. The majority of the expenses in the Statutory & General Fund are for professional fees and intergovernmental charges. Capital Improvements – On average, approximately $100,000 is spent on capital improvements in the Olympus Hills area every three years.17 Justice Courts – While there will be a slight decline in Justice Court revenue as a result of the proposed annexation, there will not be enough of a reduction in workload to reduce personnel and department overhead costs. Therefore, expenditures will remain approximately the same.

17 Source: Approximately $33,333 annually, Salt Lake County Engineering

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Sherriff Law Enforcement – There will be no reduction in Sheriff Law Enforcement expenditures.18 Water

Salt Lake City Public Utilities provides culinary water to the proposed annexation area and the areas immediately surrounding Olympus Hills including Mount Olympus, Canyon Rim and East Mill Creek. Jordan Valley Water Conservancy is the water wholesaler for the proposed annexation area. There are no impacts to water service providers as a result of the proposed annexation. Sanitary Sewer

Mt. Olympus Improvement District, formally known as Salt Lake City Suburban Sanitary District #1, provides sanitary sewer services to the proposed annexation area and the surrounding unincorporated area. The district has four treatment facilities throughout the Salt Lake Valley and enough capacity to provide service for 10 to 15 years.19 There is no impact to Mt. Olympus Improvement District as a result of the proposed annexation. Waste and Recycling

Waste and recycling services are provided to the proposed annexation area and the surrounding unincorporated area by the Wasatch Front Waste & Recycling District. In addition to serving the unincorporated areas of Salt Lake County, Wasatch Front provides waste and recycling services to Taylorsville, Herriman, Cottonwood Heights, Holladay and parts of Murray. There is no impact to the Wasatch Front Waste and Recycling District as a result of the proposed annexation. Roads

The proposed annexation area includes local streets, collector roads and principal roads including 3900 South and 4500 South – which is a State road. Electricity

Electricity is provided by Rocky Mountain Power, a division of PacifiCorp. Rocky Mountain Power has three planning areas and twenty substations within the Salt Lake Valley. There are no projected impacts to Rocky Mountain Power as a result of the proposed annexation. Gas

Questar Gas provides retail natural gas-distribution service to almost 900,000 customers in Utah, southwestern Wyoming and a small portion of southeastern Idaho. There is no projected impact to Questar Gas as a result of the proposed annexation. Libraries

There are two Salt Lake County libraries located in the unincorporated area surrounding the proposed annexation area – Calvin Smith and East Millcreek libraries. There is no projected impact to County libraries as a result of the proposed annexation.

18 Source: Sheriff Law Enforcement Division 19 Millcreek General Plan, 2009

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Parks and Recreation

Olympus Hills is a County owned and operated park located in the proposed annexation area.

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Current and Five-Year Projections: Demographics and Economic Base

Utah Code 10-2-413(3)(vi): current and five-year projections of demographics and economic base in the area proposed for annexation and surrounding unincorporated area, including household size and income, commercial and industrial development, and public facilities

Population Projections

The proposed annexation area is primarily residential with limited potential for population growth. There is only one undeveloped lot in the area which is currently owned by an institution and zoned residential. There is no projected development on this lot over the next five years. Three building permits were issued in the proposed annexation area from 2010 through 2013. One permit was issued each year for new residential construction in 2011 and 2012 and one permit was issued for a residential re-build in 2013. Therefore, population growth in the proposed annexation area is projected to be minimal over the next five years. Population growth of approximately 0.34 percent in the surrounding unincorporated area is based on historical population growth and building permit data.20 TABLE 16: POPULATION PROJECTIONS – OLYMPUS HILLS AND SURROUNDING UNINCORPORATED AREA

Area 2014 2015 2016 2017 2018 2019

Olympus Hills Population 3,660 3,662 3,664 3,666 3,668 3,670 Olympus Hills Households

1,357 1,357 1,357 1,358 1,358 1,359

Surrounding Unincorporated Area Population 60,707 60,914 61,122 61,330 61,539 61,749 Surrounding Unincorporated Area Households 23,349 23,428 23,508 23,588 23,669 23,750 Household Size

The proposed annexation area is currently part of the Millcreek CDP. The average household size in the Millcreek CDP has remained relatively constant over the past thirteen years. In 2000 the average household size was approximately 2.58 persons per household and 2.6 based on the 2010 – 2012 ACS data. Therefore, household size in the proposed annexation and surrounding unincorporated area is projected to remain relatively unchanged over the next five years. Income

The median household income for the Millcreek CDP is $62,496.21 While the ACS does not provide median household income data in sufficient detail to break out income data for the proposed annexation area, the consultants used zip code data to analyze the median household income for the proposed annexation area. Median household income in zip code 84124, which includes the proposed annexation area, is approximately $80,118 compared to approximately $62,496 in the

20 Average of ACS population increase and historic building permit data. 21 ACS 5-year average adjusted for inflation.

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Millcreek CDP. The historical average increase of 2.1 percent annually in the Millcreek CDP was used to project median household income over the next five years.22

FIGURE 5 – PROPOSED ANNEXATION AREA ZIP CODES

TABLE 17: MEDIAN HOUSEHOLD INCOME PROJECTIONS – OLYMPUS HILLS AND SURROUNDING UNINCORPORATED AREA

Description 2014 2015 2016 2017 2018 2019

Zip Code 84124 $80,118 $81,845 $83,609 $85,412 $87,253 $89,134 Millcreek CDP $62,496 $63,843 $65,220 $66,626 $68,062 $69,530 Commercial and Industrial Development

There are currently only 10 businesses in the proposed annexation area including a Sinclair gas station with convenience store, a 7-11 and eight personal service and professional businesses. Total employment in the proposed annexation area is 24.23 There is one undeveloped lot in the proposed annexation area that is approximately 1.5 acres and currently zoned residential. There are no plans to develop this lot within the next five years. The surrounding unincorporated area includes considerable commercial development along 3300 South, Highland Drive, 900 East and 2300 East. A Preliminary Area Analysis completed in March 2007 concluded that there is an “imbalance of commercial to residential property” in the area immediately surrounding the proposed annexation area. Furthermore, the study notes that “Salt Lake County should review the area and identify currently underutilized commercial properties which may be appropriate for transition to medium-to-high density residential.” The majority of the industrial area is located in the western portion of the surrounding unincorporated area. Taxable Value

The taxable value in the proposed annexation area is $203,876,116. The taxable value in the surrounding unincorporated area is $3,781,123,621. The average taxable value per capita is $55,698 in the proposed annexation area compared to $91,539 in the surrounding unincorporated

22 ACS historical median household data 23 Source: Salt Lake County Business License Data

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area. The lower taxable value per capita in Olympus Hills is reflective of the higher proportion of residential development in the proposed annexation area compared to the surrounding unincorporated area. There is limited development opportunity in both the proposed annexation area and the surrounding unincorporated area that would significantly impact growth in taxable value over the next five years. However, there has been economic redevelopment activity in West Millcreek as a result of an Urban Renewal Area adopted in 2009. Several new developments have occurred within this area following the creation of this URA including Monet Medical, Carbon Fiber Composite, Project Data Center expansion and new multi-family housing. Public Facilities There is one elementary school, Morningside Elementary, located in the proposed annexation area.

FIGURE 6 – SCHOOLS Public facilities in the surrounding unincorporated area are shown in table 18. Significant growth in public facilities is not projected in either the proposed annexation area or the surrounding unincorporated area over the next five years as there is limited opportunity for growth in both the proposed annexation area and the surrounding unincorporated area. TABLE 18:PUBLIC FACILITIES

Description Facility Police Precinct Station at 1580 East and 3900 South24 Fire Stations 101,106 and 112

Library Calvin Smith Millcreek Recreation Center

Recreation Millcreek Recreation Center Parks 230 acres Schools 20 (Mix of High Schools, Junior High Schools and Elementary Schools)

24 This building is currently leased. SLVLESA anticipates building a new precinct facility in the Millcreek area within the next five years.

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Five-Year Projected Growth in the Study Area and Adjacent Areas

Utah Code 10-2-413(3)(vii): projected growth in the area proposed for annexation and the surrounding unincorporated area during the next five years;

The proposed annexation area is primarily residential with limited potential for population growth. There is only one undeveloped lot in the area which is currently owned by an institution and zoned residential. There is no projected development on this lot over the next five years. Because of the limited availability of land for new residential construction, recent building permit activity was used to project population growth. Three building permits were issued in the proposed annexation area from 2010 through 2013. One permit was issued each year for new residential construction in 2011 and 2012 and one permit was issued for a residential re-build in 2013. Therefore, population growth in the proposed annexation area is projected to be minimal over the next five years. Population projections of 0.34 percent in the surrounding unincorporated area are based on historical population growth and building permit data. TABLE 19: POPULATION PROJECTIONS – OLYMPUS HILLS AND SURROUNDING UNINCORPORATED AREA

Area 2014 2015 2016 2017 2018 2019

Olympus Hills 3,660 3,662 3,664 3,666 3,668 3,670 Surrounding Unincorporated Area

60,707 60,914 61,122 61,330 61,539 61,749

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Present and Five-Year Cost Projections

Utah Code 10-2-413(3)(viii): the present and five-year projections of the cost of governmental services in the area proposed for annexation;

Expenses are generally evaluated by identifying excess capacity in a department, how much of the excess capacity can be used to service new development, and any expansion costs incurred in order to meet the growing demand. In order to identify the present and projected cost of services in the area proposed for annexation, the consultants met with City personnel, analyzed current service provider budgets, data specific to Olympus Hills and per capita expenditures for the City of Holladay. Utah law states that the existing level of service of the annexing municipality should be used in the cost analysis: “For purposes of Subsection (3)(a)(viii), the feasibility consultant shall assume that the level and quality of governmental services that will be provided to the area proposed for annexation in the future is essentially comparable to the level and quality of governmental services being provided within the proposed annexing municipality at the time of the feasibility study.”25 Council & Mayor The City has determined that no additional expenses will be incurred by the City Council or the Mayor as a result of the proposed annexation. Justice Court Additional Justice Court expenditures of approximately $6,100 are based on the estimated number of citations in the proposed annexation area.26 Additional expenditures include salary, office expenses and supplies, mailing costs, credit card service fees, public defender, jury expenses and witness fees.27

Administrative Agencies Administrative Agencies include salaries and expenses for the City Manager, Finance Director, City Recorder, Administrative Assistants and Receptionists. The City has determined there is currently sufficient excess administrative capacity to service any additional workload from the proposed annexation area and therefore, no additional administrative staff expenses will be incurred. Administrative agencies also include lobbyist expenses and contracts for professional services, neither of which are expected to increase if the proposed annexation area is annexed into the City.

Engineering The City currently has one in-house engineer and contracts with an engineering firm for additional engineering services. While engineering expenses directly related to road projects, storm drain, etc. are included in capital expenditures, the City estimates approximately $7,444 of additional engineering costs will be incurred to provide miscellaneous engineering services.28

25 Utah Code, 10-2-413 (3)(c) 26 Source: UPD and Holladay City Justice Court; Average 187 annual traffic citations and 21 annual criminal citations 27 Salary (additional hours for part-time clerk) - $750; Office Expenses & Supplies - $500; Mailing Costs - $250; Credit Card Service Fees - $200; Public Defender - $4,000; Witness Fees - $200; Jury Expenses - $200 28 Assessment of the annexation area, bids for projects related to the annexation area, City Council meetings, letters related to grants, etc. City estimates approximately 5% of projected engineering-related costs to service the annexation area. Total FY 2013 engineering costs of $148,887*.05 = $7,444.

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Other General Government Services Other general government expenses include boards or commissions, city attorney, treasurer, general government buildings and community events. No additional building space will be required to service the proposed annexation area. Therefore, the analysis does not include additional building expenses. The city attorney is salaried, and does not anticipate the need for additional legal personnel to service the proposed annexation area. There will be a slight increase in community events and election expenses of approximately $3,346.29

Police Services The City of Holladay currently receives police services from the Unified Police District (UPD). The UPD also provides police services to the unincorporated areas of Salt Lake County where the proposed annexation area is currently located. The UPD consists of (1) “Pooled Services” which provides services such as SWAT, forensics, investigations, dispatch, etc. that are shared by all member cities as well as the unincorporated areas of the County; and (2) Precincts in each member city, Millcreek and Kearns/Magna. In order to maintain consistent police service levels,30 as well as maintain the balance of police funding and expenses in the City of Holladay, one additional pooled officer would be allocated to the City of Holladay through the Pooled Services allocation and three officers would be transferred from the unincorporated area to the Holladay Precinct. The cost of a pooled officer is approximately $125,42431 which includes all direct costs as well as administrative, human resources, legal, IT and liability costs.32 The cost for per sworn officer is $100,920.33 The total projected increase in police expenditures is $428,184.

TABLE 20: POLICE SERVICE COSTS Description Amount One Pooled Officer $125,424 Three Officers Transferred to Holladay Precinct ($100,920 per officer) 302,760 Projected Police Service Expenditures $428,184

Fire Services The City of Holladay receives fire services from the Unified Fire Authority (UFA). The UFA also provides fire services to the unincorporated areas of Salt Lake County where the proposed annexation area is located. In order to provide fire services to the proposed annexation area, the City of Holladay will need one additional firefighter over a 24-hour period. One additional firefighter per 24-hour shift is equivalent to 3.5 FTE’s. The total cost per FTE for UFA fire service personnel is $118,960,34 for a total cost of $416,360 for 3.5 FTE’s. UFA apparatus fees are charged on a pro rata basis. If Olympus Hills annexes into the City of Holladay, the additional apparatus charge to the City of Holladay is $20,758. The total additional fire service cost to the City of Holladay is $437,118.

29 1,357 households * $0.47 (mailing cost) = $638. Additional costs for paper, etc. of approximately $64. Election costs are annualized and are based on general election cost every four years of $50,000 and every other year election costs of $25,000. Equates to $1.95 per household or $0.75 per capita. 30 Current police service LOS in Holladay City is 1.02 officers per thousand. The population in the proposed annexation area in 3,660. 31 Source: UPD 32 Based on a taxable value in the proposed annexation area of approximately $196,191,485, a population shift of approximately 3,500 and a cases assigned number shift of 750. 33 Source: UPD 34 Source: UFA

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TABLE 21: FIRE SERVICE COSTS Description Amount Cost per FTE Firefighter $118,960 Number of FTE’s 3.5 Firefighter Expenses $416,360 Apparatus Charge $20,758 Projected Fire Service Expenditures $437,118

Animal Services The City of Holladay currently contracts with Salt Lake County for animal services. The estimated cost to provide animal services to the proposed annexation area is $14,200. This amount is based on the population and the number of service calls in the proposed annexation area.35

Building Inspections The proposed annexation area is primarily built-out and therefore, at this time, the City does not anticipate any significant building permit expenses for new buildings from the proposed annexation area. Building inspection expenditures are projected to be from residential re-modelling, etc. Projected building permit inspection expenses of $4,560 are based on 50 percent of the FY 2013 residential building inspection expenses to account for the limited new construction activity in the area. TABLE 22: BUILDING INSPECTION COSTS Description Amount Residential Portion of Plan Check Fee Revenue 36 $60,897 Reduction for Primarily Built-Out Area 50% Expenditures Attributable to Residential Improvements $30,449 Households (City of Holladay)37 10,264 Residential Improvements Expenditures per Household $2.97 Households (Proposed Annexation Area) 1,357 Projected Building Inspection Expenditures $4,030

Class C Road Funds The City of Holladay currently contracts with Salt Lake County Public Works for snow removal, general road maintenance, signs, traffic signals, and school flashers. The City contracts with Interstate Barricades for striping. The projected annual general road maintenance costs which include sign maintenance, striping, snow removal, street sweeping and signal/flasher maintenance is $158,449. TABLE 23: CLASS C ROAD FUND EXPENDITURES Description Cost Sign Maintenance38 $500 Striping39 385

35 Source: Salt Lake County Animal Services. This amount is a preliminary estimate by the SLCo Animal Services Department based on the population and calls for service in the proposed annexation area. However, the actual contract amount may be different from this preliminary estimate based on a variety of factors including offsetting revenue and the number of contract cities served by SLCo Animal Services and their respective populations. 36 Holladay City FY 2013, 37 US Census Data 38 Source: Salt Lake County Public Works 39 Source: Interstate Barricades

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Description Cost Snow Removal40 150,000 Traffic Signals41 1,000 School Flashers42 1,000 Street Sweeping43 5,564 Total Annual General Road Maintenance Expenditures $158,449

In addition to the annual general road maintenance costs, there will be a one-time cost of approximately $6,000 to change the logos on the street signs from the Unincorporated County logo to the Holladay City logo. Road cut repairs are also included in Class C Road expenses. Estimated road cut expenditures are estimated at $6,256.44 Salt Lake County recently purchased the street lights in the unincorporated area from Rocky Mountain Power for $294 per light. There are 102 street lights in the proposed annexation area, resulting in a total cost to the City of Holladay of $29,988. While the details of a purchase of the street lights from the County have not been specified, this analysis assumes the City will purchase the street lights over a two-year period. Annual street light costs for street lights owned by the City will be significantly lower compared to the annual per light cost the city is currently paying to Rocky Mountain Power for the other street lights in the City. Based on actual annual costs, the power cost for the street lights, flashers and signals in the proposed annexation area is $2,130.

The total projected Class C road expense for the proposed annexation area in 2014 is approximately $187,829.

TABLE 24: CLASS C ROAD FUND EXPENDITURES Description Amount Annual General Road Maintenance Costs $158,449 Annual Power Costs (street lights, flashers, signals) 2,130 Change Sign Logos ( one-time fee) 6,000 Road Cut Repairs 6,256 Purchase Street Lights (two payments) 14,994 Projected Class “C” Roads Expenditures $187,829

Parks & Recreation The current level of service for Parks & Recreation in Holladay City is approximately $10.03 per capita. A reduced level is used in this analysis as there are no City-maintained parks in the proposed annexation area. Olympus Hills Park, which is located in the proposed annexation area, is a County Park maintained by the County. Total additional Parks & Recreation expenses to service the proposed annexation area are approximately $18,373.45

40 Source: Salt Lake County Public Works 41 Source: Salt Lake County Public Works 42 Source: Salt Lake County Public Works 43 Based on current cost per road mile 44 Based on $481.23 average per road mile for road cut expenditures in Holladay City and 13 road miles in the proposed annexation area. Road cut repairs are billed based on the actual cost to the City, and therefore there is no net cost to the City for road cut repairs. 45 In addition to maintaining parks, Parks & Recreation personnel also assist with street signs, streetscapes, tree trimming and other miscellaneous maintenance projects.

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TABLE 25: PARKS & RECREATION Description Amount Current Level of Service Per Capita $10.03 Reduced Level (No Parks in Annexation Area) 50% Expenses Per Capita (Annexation Area) $5.02 Population (Annexation Area) 3,660 Projected Parks & Recreation Expenditures $18,373

Community Development The City’s Community Development Department provides building, code compliance, planning & zoning, mapping and GIS services to the City’s residents and businesses. The City has determined that it will need approximately 0.25 additional FTE’s to service the proposed annexation area. Total additional community development costs including salary and department overhead costs are estimated to be approximately $15,051.46

Capital Expenditures An analysis of the condition of the roads in the proposed annexation area by both the County and the City indicate that approximately ten percent of the roads will require an overlay or similar treatment over the next 3-5 years. Additionally, approximately 45 percent of the roads will require slurry seal or similar treatment over the next 3-5 years. While no pending storm drain problems were noted, funds to address possible storm drain infrastructure deterioration or other problems are allocated based on the City’s current level of investment in storm drain-related expenditures. Funds for curb, gutter and sidewalks are also allocated based on the City’s current level of service. Total annual capital project costs in the proposed annexation area are projected to be approximately $94,760. Engineering costs are projected to be approximately ten percent of project costs for a total cost of approximately $104,236.47

TABLE 26: CAPITAL EXPENDITURES Description Amount Overlay $49,658 Slurry Seal 27,359 Storm Drain 14,368 Sidewalks 2,958 Curb & Gutter 417 Total Project Costs $94,760 Engineering 9,476 Projected Annual Capital Expenditures $104,236

Summary of Projected Expenditures

Utah code requires five-year projections of the cost of governmental services in the area proposed for annexation. Total budgeted expenditures for Holladay City have increased on average 1.8 percent annually over the last four years from $12,736,535 in FY 2011 to $13,455,935 in FY 2014.

46 Current annual code enforcement time per household and business is 0.11 hours. Total number of households and commercial businesses in the proposed annexation area is 1,368. 0.11 * 1,368 = 148 additional annual hours of code enforcement. Number of home occupation businesses in the proposed annexation area is approximately 73 and the number of commercial businesses is 10. Estimated annual time per license for business licensing is approximately 30 minutes, resulting in approximately 42 additional hours of business licensing time. Additional planning time is estimated at approximately four hours per week for a total of an additional 334 hours annually. This equates to .16 FTE’s , but the City is projecting an additional .25 FTE’s to account for Community Development management time, GIS, etc. 47 Assumes capital expenditures for roads are allocated over a four-year period.

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Growth rates for projected expenditures impacted by the proposed annexation are summarized in the table below followed by a more detailed explanation: TABLE 27: EXPENDITURE GROWTH RATES Description Amount Engineering 1% Judicial 1% Police 3.5% Fire 3.75% Animal Control 5% Building Inspections 1% Class C Road Program 5% Parks & Park Areas 1% Community Development 1% Capital Projects 5% Engineering Budgeted engineering expenses have increased on average one percent annually over the past five years. The City feels this is an accurate benchmark for projecting future engineering expenditures over the next five years. Judicial The City projects judicial expenditures to increase at approximately one percent over the next five years. Police Holladay City police expenditures have historically increased at a rate less than 3.5 percent. However, the Unified Police Department projects the annual cost of police services to increase approximately 3.5 percent based on the projected cost increases for salaries, pension, department overhead, etc. This rate of increase does not include projections based on development growth in communities; it solely represents the inflation portion of the projected increase in costs. Fire While Holladay City fire expenditures have historically increased at a rate of less than 3.75 percent, the Unified Fire Authority projects the annual cost of fire services to the City to increase approximately 3.75 percent based on the projected cost increases for salaries, pension, safety equipment, communication equipment, etc. This rate of increase does not include projections based on development growth in communities; it solely represents the inflation portion of the projected increase in costs. Animal Control Animal control costs have historically increased at a rate of less than five percent. However, based on the Animal Control cost modelling, the County projects Holladay City’s animal service costs will increase annually at approximately five percent over the next five years. Building Inspections Budgeted building inspection costs have decreased an average of approximately 1.7 percent annually over the past four years. However, the City projects building inspection costs may increase at approximately one percent over the next five years.

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Class C Road Program General road maintenance costs have increased at a rate of less than five percent over the past four years. However, the County projects an annual increase in the cost of services to contract cities over the next five years at approximately five percent. Park & Park Areas The budgeted cost for Park and Park areas has varied year to year over the past six years with alternating increasing and decreasing costs. The City projects Park & Park Area costs will increase approximately one percent annually over the next five years. Community Development Community Development costs have decreased on average 1.6 percent annually over the past four years. However, the City projects a slight increase in costs of one percent over the next five years. Capital Projects While the cost of capital projects has increased less than five percent over the past four years, many of the capital projects are contracted out with the County. Therefore, this analysis assumes the Salt Lake County Public Works projection of a five percent increase in costs for contract cities. The following table shows projected City expenditures impacted by the proposed annexation of Olympus Hills into Holladay City assuming current service providers provide services over the next five years. TABLE 28: PROJECTED EXPENDITURES Description 2014 2015 2016 2017 2018 2019

General Government Judicial $6,100 $6,161 $6,223 $6,285 $6,348 $6,411

Engineering $7,444 $7,518 $7,593 $7,669 $7,746 $7,823 Community Events & Elections $3,346 $3,346 $3,346 $3,346 $3,346 $3,346

Sub-Total General Government

$16,890 $17,025 $17,162 $17,300 $17,440 $17,580

Public Safety Police Department $428,184 $443,170 $458,681 $474,735 $491,351 $508,548

Fire Department $437,118 $453,510 $470,517 $488,161 $506,467 $525,460 Animal Control and Regulation $14,200 $14,910 $15,656 $16,439 $17,261 $18,124

Building Inspection $4,030 $4,070 $4,111 $4,152 $4,194 $4,236

Sub-Total Public Safety $883,532 $915,660 $948,965 $983,487 $1,019,273 $1,056,368

Highway and Public Improvements

Class "C" Road Program $187,829 $190,920 $185,472 $194,746 $204,483 $214,707 Sub-Total Highway and Public Improvements $187,829 $190,920 $185,472 $194,746 $204,483 $214,707

Parks, Rec. and Public Property

Park and Park Area $18,373 $18,557 $18,743 $18,930 $19,119 $19,310 Sub-Total Parks, Rec. and Public Property $18,373 $18,557 $18,743 $18,930 $19,119 $19,310

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Description 2014 2015 2016 2017 2018 2019

Community and Economic Development

Community Development $15,051 $15,202 $15,354 $15,508 $15,663 $15,820 Sub-Total Community and Economic Development

$15,051 $15,202 $15,354 $15,508 $15,663 $15,820

Transfers and Other Uses

Transfer To: Capital Projects $104,236 $109,448 $114,920 $120,666 $126,699 $133,034 Sub-Total Transfers and Other Uses

$104,236 $109,448 $114,920 $120,666 $126,699 $133,034

Total Expenditures $1,225,911 $1,266,812 $1,300,616 $1,350,637 $1,402,677 $1,456,819

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Projected City Revenues

Utah Code 10-2-413(3)(ix): the present and five-year projected revenue to the proposed annexing municipality from the area proposed for annexation;

Property Tax The total taxable value of locally assessed real property48 in the proposed annexation area is approximately $203,876,116.49 Based on the City’s current property tax rate of 0.001707, the projected property tax revenue from the proposed annexation area is approximately $348,017. TABLE 29: PROPERTY TAXES Description Amount Total Taxable Value $203,876,116 Property Tax Rate 0.001707 Property Tax $348,017 Sales Tax Sales tax revenues are distributed based on population and point of sale (POS). Based on information provided by the Utah State Tax Commission, the annual average per capita sales tax distribution in Salt Lake County in 2012 was approximately $86.04.

TABLE 30: SALES TAX PER CAPITA Month Population Total Distribution $ Amount per Capita January 148,953 $1,007,741 $6.77 February 148,953 1,289,566 8.66 March 148,953 983,200 6.60 April 148,953 926,507 6.22 May 148,953 1,223,342 8.21 June 148,932 921,192 6.19 July 148,932 999,964 6.71 August 148,932 1,220,919 8.20 September 148,932 1,019,687 6.85 October 148,932 1,076,869 7.23 November 148,932 1,172,150 7.87 December 148,932 972,670 6.53 Total Annual Distribution per Capita $86.04 The projected sales tax revenue based on the population in the proposed annexation area is approximately $314,906.

TABLE 31: SALES TAXES POS Description Amount Annual Distribution per Capita $86.04 Population in Proposed Annexation Area 3,660 Projected Sales Tax Revenue (Based on Population) $314,906

48 Area is primarily residential and therefore, business personal property is minimal. 49 Salt Lake County Assessor’s Office

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The proposed annexation area is primarily residential. However, there are a few commercial businesses located at approximately 2900 East and 4430 South as well as a few home occupation businesses scattered throughout the area. The estimated POS sales tax revenue for the proposed annexation area is $6,500.50 The total projected sales tax revenue for the proposed annexation area is approximately $321,406 less fees and reductions of approximately $4,213,51 for a total of $317,193.

TABLE 32: TOTAL SALES TAX DISTRIBUTION Description Amount Population Distribution $314,906 POS Distribution 6,500 Total Sales Tax Distribution $321,406 Less: Fees and Reductions 4,213 Projected Sales Tax Revenue $317,193

Franchise Tax Revenue Energy sales & use tax revenue of approximately $187,313 is calculated based on the average gas and electric use in the proposed annexation area as shown in table 33.

TABLE 33: FRANCHISE TAX REVENUE

Description Average Annual Bill

Franchise Tax

# of Households

Projected Revenue

Gas $994 $59.64 1,357 $80,931 Electric 1,294 $77.64 1,357 $105,357 Commercial Business Franchise Tax Revenue52 $1,025 Projected Energy Sales & Use Tax Revenue $187,313

Telephone & cable franchise tax revenue of $68,756 is based on average cable and telephone bills in the proposed annexation area. TABLE 34: TELEPHONE & CABLE FRANCHISE TAX REVENUE

Description Average Annual Bill

Franchise Tax

# of Households

Projected Revenue

Telephone & Cable $1,158 $50.67 1,357 $68,756

Motor Vehicle Fee-In-Lieu Motor vehicle fees-in-lieu revenue is calculated on a per household basis of approximately $21.92 per household and is projected to be approximately $29,747.53 TABLE 35: MOTOR VEHICLE FEE-IN-LIEU Description Amount Motor Vehicle Fee-In-Lieu54 $225,000

50 Utah State Tax Commission 51 Based on 1.31%. in deductions, Salt Lake County 52 Based on average square feet of commercial and per sq. ft. costs for utilities 53 While Motor Vehicle Fee-In Lieu are calculated based on a pro rata share of tax revenues in a given tax district, discussions with the Salt Lake County Treasurer’s office indicated a per household estimate would be a good estimate of MV fees for this analysis. Because motor vehicle revenues are distributed on a pro rate share, there may be some minor reductions in motor vehicle fee-in-lieu revenues to other taxing entities if annexation occurs. 54 Holladay City FY 2014

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Description Amount Households (Holladay City)55 10,264 Motor Vehicle Fees-In-Lieu Tax Revenue per Household $21.92 Households (Proposed Annexation Area) 1,357 Projected Motor Vehicle Fees-In-Lieu $29,745

Business Licenses Business license fee revenue is based on the recently adopted Holladay City Business License Fee Schedule, and is projected to be approximately $11,416.56 TABLE 36:BUSINESS LICENSE FEE REVENUE Description # of Businesses Business License Fee Total Convenience Store/Gas 2 $1,750 $3,500 Personal Services 6 300 1,800 Professional Business Services 2 225 450 Apartment57 (5-9 Units) 1 191 191 Estimated # of Home Occupation Businesses 73 75 5,475 Projected Business License Fee Revenue $11,416

Non-Business Licenses & Permits The proposed annexation area is primarily built-out and therefore, at this time, the City does not anticipate any significant building permit revenue for new buildings from the proposed annexation area. Building permit revenue is projected to be from residential re-modelling, etc. Projected building permit inspection revenues and plan check fees of $10,63958 are based on 50 percent of the FY 201359 residential building permit/plan check fee revenues to account for the limited new construction activity in the area. TABLE 37: BUILDING PERMIT FEE REVENUE Description Amount Building Permit Fees FY 2013 $100,050 Percent Reduction for Limited Construction Activity 50% Revenue Attributable to Residential Improvements $50,025 Households (Holladay City)60 10,264 Building Permit Revenue Per Household $4.87 Households (Proposed Annexation Area) 1,357 Projected Building Permit Revenue $6,609

TABLE 38: PLAN CHECK FEE REVENUE Description Amount Plan Check Fees FY 2013 $60,897 Percent Reduction for Limited Construction Activity 50% Revenue Attributable to Residential Improvements $30,449

55 ACS 5 year, 2008 - 2012 56 The number of home occupation businesses is projected based on the percent of home occupation businesses as a percent of households in Holladay City. 57 8 Units 58Building permit fee revenues of $6,609+plan check fee revenues of $4,030 = $10,639 59 FY 2014 budgeted revenue projections for non-business licenses and permits were unusually high due to projected development in FY 2014. Therefore, the City indicated FY 2013 would be a better average indicator of revenue projections over the next five years. 60 US Census Data

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Description Amount Households (Holladay City)61 10,264 Plan Check Fee Revenue Per Household $2.9762 Households (Proposed Annexation Area) 1,357 Projected Plan Check Fee Revenue $4,030 Animal Licenses Holladay City contracts with Salt Lake County for animal services and all animal license fees are paid directly to the County.

Land Use Fees Land use fee revenue is projected to be similar to the current revenue of $0.61 per household.63 Total plan check fee revenues are estimated at $833.

Rental of City Hall Holladay City rents the conference and event rooms located at City Hall. These rooms are used by both residents and employers. Therefore, the projected parks & public property revenue of $2,379 for the proposed annexation area is calculated based on a per capita and employment basis.

TABLE 39: RENTAL OF CITY HALL Description Amount Rental of City Hall64 $19,500 Population & Employment 30,203 Revenue Per Capita & Employment $0.6565 Population & Employment (Proposed Annexation Area) 3,684 Projected Rental of City Hall Revenue $2,379

Fines An average of 198 traffic citations and 22 criminal citations are issued annually in the proposed annexation area.66 According to the most recent Utah State Bail Schedule, the average fine for traffic citations is $90 and $640 for criminal citations. Therefore, the projected fines revenues in the proposed annexation area are $31,900.

TABLE 40: FINES Description Amount Fines Total Traffic Citations 198 $90 $17,820 Criminal Citations 22 $640 $14,080 Projected Fines Revenue 220 $31,900

Traffic School Traffic school revenue is received from both residents and non-residents who are issued traffic citations in Holladay City and attend traffic school. Approximately 60 percent of traffic citations issued in Holladay City are to residents and approximately 40 percent are to non-residents.67 While

61 US Census Data 62 $2.9698 – number is rounded in table 63 $42,000*.15 percent (attributable to residential)/10,264 = $0.61 64 Holladay City FY 2014 Budget 65 $0.6457 – number is rounded in table 66 Source: UPD – 2 year analysis of citations issued in the proposed annexation area 67 UPD

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the proposed annexation area is primarily residential, the City will be allocated approximately 50 percent of the traffic citations from the streets bordering the annexation area (2700 East, 3900 South and 4430 South) which service pass-through traffic in addition to residential traffic. Therefore, this analysis assumes 60 percent of revenue for residential traffic plus 20 percent for pass-through traffic for a total of approximately $1,695 projected traffic school revenue. TABLE 41: TRAFFIC SCHOOL REVENUES Description Amount Traffic School Revenue68 $17,550 Population & Employment 30,203 Per Population & Employment 0.58 Percent of Current Level 80% Traffic School Revenue Per Population & Employment (Proposed Annexation Area) 0.46 Population & Employment (Annexation Area) 3,684 Projected Traffic School Revenue $1,695

Class C Road Funds Class C road funds are distributed based on both road miles and population. Projected Class C Road Fund revenue for the proposed annexation area is calculated using the FY 2013 per capita distribution of $22.28 and $586.75 per weighted road mile. There are approximately 13 road miles69 in the proposed annexation area and 65 weighted miles.70 The total projected Class C Road Funds for the proposed annexation area are approximately $119,684.

TABLE 42: CLASS C ROAD FUND DISTRIBUTION Per Capita Distribution

Population Per Weighted

Road Mile Distribution Weighted

Road Miles Total

$22.28 3,660 $81,545

$586.75 65 38,139

$119,684

Liquor Fund Allotment The liquor fund allotment for the proposed annexation area is projected to be similar to the current $1.07 per capita liquor allotment for the City of Holladay.71 TABLE 43: LIQUOR FUND ALLOTMENT City of Holladay Liquor Fund Allotment per Capita

Population Projected Liquor Fund Allotment

$1.07 3,660 $3,916

68 Holladay City Budget FY 2014; Total Traffic School Revenue = $45,000 – approximately 39% is from Holladay City residents and non-residents (employees and pass-thru traffic) and 61% from residents and non-residents in Cottonwood Heights (employees and pass-thru traffic). 69 Salt Lake County Public Works Department 70 Weighted miles: paved surface = 5, gravel surface = 2, dirt/other = 1 71 The Liquor Fund Allotment for cities is based on the distribution formula found in Utah Code Section 32B-2-404 which distributes funds as follows: 25% to municipalities and counties on the basis of the percentage of the state population residing in each municipality and county; 30% to municipalities and counties on the basis of each municipality's and county's percentage of the statewide convictions for all alcohol-related offenses; 20% to municipalities and counties on the basis of the percentage of the following in the state that are located in each municipality and county: state stores; package agencies; retail licensees; and off-premise beer retailers; and 25% to the counties for confinement and treatment purposes authorized by this part on the basis of the percentage of the state population located in each county.

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Community Development Block Grant The CDBG allotment for the proposed annexation area is projected to be similar to the historical average $1.54 per capita allotment for the City of Holladay.72

TABLE 44: CDBG ALLOTMENT City of Holladay CDBG Allotment per Capita

Population Projected CDBG

Allotment $1.5473 3,660 $5,649

Summary of Revenues TABLE 45: SUMMARY OF REVENUES

Category - Revenues 2014 2015 2016 2017 2018 2019

Taxes Property Tax - Current $348,017 $348,208 $348,398 $348,588 $348,778 $348,968

General Sales & Use Taxes $317,193 $317,363 $317,533 $317,703 $317,873 $318,043 Franchise Tax - Cable TV & Muni Telephone Tax $68,756 $71,506 $74,366 $77,341 $80,435 $83,652

Franchise Tax - Questar Gas $81,376 $83,101 $84,862 $86,660 $88,496 $90,371

Franchise Tax - Rocky Mountain

$105,937 $107,474 $109,917 $112,360 $114,802 $117,245

Motor Vehicle Fee-In-Lieu $29,745 $29,745 $29,745 $29,745 $29,745 $29,745 Sub-Total Taxes $951,024 $957,397 $964,821 $972,397 $980,129 $988,024

Licenses & Permits

Business Licenses & Permits $11,416 $11,416 $11,416 $11,416 $11,416 $11,416

Building Permits $6,609 $6,609 $6,609 $6,609 $6,609 $6,609

Plan Check Fees $4,030 $4,030 $4,030 $4,030 $4,030 $4,030

Road Cut Permits74 $6,256 $6,256 $6,256 $6,256 $6,256 $6,256 Sub-Total Licenses & Permits $28,311 $28,311 $28,311 $28,311 $28,311 $28,311

Intergovernmental CDBG Grant $5,649 $5,652 $5,655 $5,658 $5,661 $5,665 Class C Road Funds $119,684 $119,728 $119,773 $119,817 $119,862 $119,906 Liquor Fund Allotment $3,916 $3,918 $3,918 $3,918 $3,918 $3,918 Sub-Total Intergovernmental $129,249 $129,298 $129,346 $129,393 $129,441 $129,489

Charges for Services Land Use Fees $833 $833 $833 $833 $833 $833 Sub-Total Charges for Services $833 $833 $833 $833 $833 $833 a

72 FY 2013 CDBG - $23,264; FY 2014 CDBG - $58,855 73 $1.5434 – number is rounded in table 74 See expenditures for details on the calculation of this number.

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Category - Revenues 2014 2015 2016 2017 2018 2019

Other Revenue

Rental of City Hall $2,379 $2,379 $2,379 $2,379 $2,379 $2,379

Sub-Total Other Revenue $2,379 $2,379 $2,379 $2,379 $2,379 $2,379

Fines & Forfeitures

Fines $31,900 $31,917 $31,934 $31,951 $31,968 $31,985

Traffic School $1,695 $1,696 $1,697 $1,698 $1,699 $1,700

Sub-Total Fines $33,595 $33,613 $33,631 $33,649 $33,667 $33,685

Total Revenues $1,145,391 $1,151,831 $1,159,321 $1,166,962 $1,174,760 $1,182,721

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Projected Tax Impacts

Utah Code 10-2-413(3)(x): the projected impact the annexation will have over the following five years on the amount of taxes that property owners within the area proposed for annexation, the proposed annexing municipality, and the remaining unincorporated county will pay;

City of Holladay Tax Impacts

If Olympus Hills annexes into Holladay City, tax impacts to residents range from approximately $1.71 to $5.67 per $100,000 of primary residential value annually over the next five years. The tax impact per $100,000 for non-primary residential and commercial value ranges from approximately $3.10 to $10.30 over the next five years. TABLE 46: CITY OF HOLLADAY TAX IMPACTS

2014 2015 2016 2017 2018 2019

Olympus Hills Taxable Value $203,876,116 $203,988,048 $204,099,456 $204,210,864 $204,322,272 $204,433,680

City of Holladay Taxable Value

$2,435,129,860 $2,439,056,655 $2,443,084,371 $2,447,112,087 $2,451,139,803 $2,455,167,519

Total Taxable Value $2,639,007,990 $2,643,046,718 $2,647,185,843 $2,651,324,968 $2,655,464,093 $2,659,603,218

Budget Deficit or Surplus

-$80,520 -$114,981 -$141,295 -$183,675 -$227,917 -$274,098

Current City of Holladay Tax Rate

0.001707 0.001707 0.001707 0.001707 0.001707 0.001707

Change in City of Holladay Tax Rate

0.000031 0.000044 0.000053 0.000069 0.000086 0.000103

Total Tax Rate 0.001738 0.001751 0.001760 0.001776 0.001793 0.001810

Tax Impacts per $100,000 Primary Residential Value

$1.71 $2.42 $2.92 $3.80 $4.73 $5.67

Tax Impacts per $100,000 Non-Residential Value

$3.10 $4.40 $5.30 $6.90 $8.60 $10.30

Proposed Annexation Area Tax Impacts

The Salt Lake County Municipal Services Fund, which provides municipal services to residents in Unincorporated Salt Lake County, is currently supported primarily through sales tax revenue. Police and fire services for residents in Unincorporated Salt Lake County, are supported through a property tax. There is also a minimal tort liability property tax for residents in the Unincorporated County. Residents in the Unincorporated County do not pay franchise taxes.75 Tax revenues paid by residents in the City of Holladay include property tax, sales tax and franchise tax revenues. If annexation occurs, Olympus Hills residents will pay approximately $264 in property taxes compared to $684 in the Unincorporated County. Residents in the proposed annexation area will also pay franchise taxes and their portion of the estimated UFSA lease revenue bond of

75 Utah Code currently does not give Counties the ability to charge franchise taxes to residents in the unincorporated portions of the County,

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approximately $52 per household. The total tax impact for residents in the proposed annexation area is an estimated $180 reduction in overall municipal tax burden if annexation occurs. TABLE 47: OLYMPUS HILLS TOTAL IMPACT

Description Annexation into City of Holladay

Unincorporated County

Olympus Hills Average Home Value $276,000

$276,000

Property Tax Rate76 0.001738

0.00450377

Annual Property Tax $264

$684

Average Franchise Tax per HH $188 NA

Estimated Bond Payment (Revenue Lease Bond)

$52

(included in UFSA tax rate)

Total $504

$684

Taxes on the average home value in the proposed annexation area range from a projected $452 annually to $490 over the next five years. Including the estimated annual bond payment per household, the total ranges from $504 to $542 over the next five years. TABLE 48: HOLLADAY CITY TAX PROJECTIONS

2014 2015 2016 2017 2018 2019

Average Home Value $276,000 $276,000 $276,000 $276,000 $276,000 $276,000 Property Tax Rate 0.001738 0.001751 0.001760 0.001776 0.001793 0.001810 Property Tax $264 $266 $267 $270 $272 $275 Franchise Tax $188 $193 $198 $204 $209 $215 Total Taxes $452 $459 $465 $474 $481 $490

Estimated Bond Payment $52 $52 $52 $52 $52 $52 Total Impact - Annexation into City of Holladay

$504 $511 $517 $526 $533 $542

Remaining Unincorporated County Tax Impacts

There is currently no property tax rate for the Municipal Service Fund. The reduced revenues of approximately $173,340 as a result of the annexation would need to be recouped through an increase in sales tax revenue or a budget reduction of approximately 0.37 percent. TABLE 49: REMAINING UNINCORPORATED COUNTY TAX IMPACTS


Balance Other

Revenue Transfer

In Total

Available Budget

Transfer Out

Ending Balance

230 - Current Municipal Services Fund

$6,807,000 $41,775,669 $2,100,912 $50,683,581 $46,946,156 $369,673 $3,367,752

With Proposed Annexation $6,807,000 $41,566,866 $2,100,912 $50,474,778 $46,910,693 $369,673 $3,194,412

Difference $0 -$208,803 $0 -$208,803 -$35,463 $0 -$173,340

The tort liability fund imposes a minimal tax of approximately 0.000081 and also receives motor vehicle fee-in-lieu revenues. The County projects a reduction in tort liability revenue of

76 Updated tax rate assuming annexation. 77 This is the combined tax rate of the UFSA, SLVLESA and the Tort Liability Fund.

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approximately $16,400 and a reduction in motor vehicle fee-in-lieu revenue of approximately $700. The tort liability tax rate would need to increase 0.000024 in order to recoup the $17,100 lost revenues from the Olympus Hills area. This equates to $0.13 per $100,000 home value and $0.24 per $100,000 of taxable commercial value. TABLE 50: REMAINING UNINCORPORATED COUNTY TAX IMPACTS


Balance Tax

Rate Tax

Revenue Other

Revenue Total

Available Budget

Ending Balance

232 - Municipal Services - Tort Liability

$2,425,000 0.000081 $757,000 $32,000 $3,214,000 $302,000 $2,912,000

With Proposed Annexation $2,425,000 $740,600 $31,300 $3,196,900 $302,000 $2,894,900

Difference

-$17,100

Unified Fire Service Area Tax Impacts

If annexation occurs, the cost for the firefighter FTE to service the proposed annexation area will shift from UFSA to Holladay City resulting in no impact to the UFA. However, UFSA will experience a slight negative impact of $9,778 if annexation occurs as the reduction in the tax revenue UFSA collects in the proposed annexation area is greater than the reduction in the total estimated cost UFSA will pay to the UFA for fire services. In addition to the Holladay cost for fire services in the proposed annexation area, Olympus Hills is responsible for their portion of the 2008 lease revenue bond issued for new fire stations. The Olympus Hills estimated portion of the bond is $69,905 or approximately $51.51 per household. Salt Lake Valley Law Enforcement Area Tax Impacts

. If annexation occurs, the cost for the four police FTE’s to service the proposed annexation area will shift from SLVLESA to Holladay City resulting in no impact to the UPD. However, SLVLESA will experience a slight negative impact of $26,460 if annexation occurs as the reduction in the tax revenue SLVLESA collects in the proposed annexation area is greater than the reduction in the total estimated contract cost SLVLESA will pay to the UPD for police services.

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Past Expansion in Terms of Population and Construction

Utah Code 10-2-413(3)(xi): past expansion in terms of population and construction in the area proposed for annexation and the surrounding unincorporated area;

Past expansion in construction can be tracked through the historic number of building permits issued in the proposed annexation area. The proposed annexation area is primarily residential with limited potential for population growth. There is only one undeveloped lot in the area which is currently owned by an institution and is zoned residential. There is no projected development on this lot over the next five years. Three building permits were issued in the proposed annexation area from 2010 through 2013. One permit was issued each year for new residential construction in 2011 and 2012 and one permit was issued for a residential re-build in 2013. Therefore, population and construction growth in the proposed annexation area is projected to be minimal over the next five years. An average of six non-residential building permits and 66 residential building permits annually have been issued in the surrounding unincorporated area.

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Chapter 13: Extension of Nearby Municipal Boundaries

Utah Code 10-2-413(3)(xii): the extension during the past 10 years of the boundaries of each other municipality near the area proposed for annexation, the willingness of the other municipality to annex the area proposed for annexation, and the probability that another municipality would annex some or all of the area proposed for annexation during the next five years if the annexation did not occur;

The following is a summary of past expansion of boundaries of other municipalities over the past ten years: TABLE 51: EXTENSION OF NEARBY MUNICIPAL BOUNDARIIES Annex ID Plat Area Name Location Year

1132 Salt Lake City Final Local Entity Plat MWDSLS De-Annexation Plat #1 2228(all) 2223 (all) 2010

1112 Salt Lake City Sharp Properties De- annexation 152221,22 2009 1113 Salt Lake City Sharp Properties De- annexation 152221,22 2009 37 Holladay East Holladay Annex 22M 2008

1103 Salt Lake City Jordan River State Park Annexation

08-21-21,08-22-11,08-22-12,08-22-21, 08-15-11,08-

15-12,08-15-31,08-15-32,08-16-41,08-16-42

2008

219 Murray Plat of Territory Disconnected 21-23-11 2007 220 Murray Murray City Annexation Plat 22-20-11 2007 221 Murray Murray City Annexation Plat 22-06-11 2007 418 Salt Lake City New School District 28-01-11 2007

9 Cottonwood

Heights Cottonwood Heights Map 22-20-29 et al 2006

8 Cottonwood

Heights Incorporation 22-20-et al 2005

36 Holladay West Holladay Annex 22-08,22-09 2005

417 Salt Lake City Salt Lake School District

Annexation to Salt Lake City Cooperation

8-22-12,08-22-12 2004

The cities bordering the unincorporated area surrounding Olympus Hills include Murray, Salt Lake City, South Salt Lake City, West Valley, Taylorsville and Holladay (the annexing City). Of the bordering cities, only South Salt Lake and Salt Lake City – in addition to Holladay City, have annexation plans that include Olympus Hills. TABLE 52: ANNEXATION PLANS City Annexation Plan Includes Olympus Hills South Salt Lake City Yes Salt Lake City Yes Murray No West Valley City No Taylorsville No

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History, Culture, and Social Aspects of the Proposed Annexation Area and Surrounding Area

Utah Code 10-2-413(3)(xiii): the history, culture, and social aspects of the area proposed for annexation and surrounding area;

The following is an excerpt of the history of Millcreek included in the Millcreek General Plan (2012):

The early history of Millcreek Township is closely linked with the modern history of the Valley of the Great Salt Lake, beginning with the arrival of the first Mormon pioneers into the valley in the summer of 1847. Incoming settlers explored the area in order to secure sites advantageous for farming and other activities. Soon after arrival they had explored the Valley’s nearby canyons, from Emigration Canyon south to Little Cottonwood Canyon. A then unnamed canyon and its main stream attracted settlers to the area of the present-day Millcreek Township. The area’s timber could easily be hauled

down the canyon for home building, and water-powered sawmills were essential to providing finished lumber for development throughout the valley. The proximity of the canyon to Salt Lake City gave added incentive to develop the area. The canyon eventually became known as Mill Creek Canyon. In the decades that followed, increased settlement took place along Millcreek. With growing prosperity in the country after World War II, and with the increased auto mobility of Americans between 1945 and 1960, there came a proliferation of suburban communities on the fringe of major metropolitan areas, such as Salt Lake City. Veterans returned from the War, started new families, and needed adequate housing. As more housing was built, the population of Millcreek’s neighborhoods increased from approximately 6,500 prior to the war to approximately 21,500 in 1960. New suburbs, mostly populated by families moving out of Salt Lake City, were unlike the historic small towns that were the norm in pre-World War II Utah. Rather than developing distinct town centers, these suburbs developed commercial areas along main thoroughfares such as 3300 South or Highland Drive, reflecting a growing reliance on automobile transportation across the country. This pattern has resulted in today’s lack of a well-defined center for Millcreek Township. In the 1980s and 1990s, several communities in Salt Lake County incorporated as cities. New cities have grown up around present-day Millcreek Township. A few key commercial and residential areas have been annexed into adjacent cities. Salt Lake City annexed Brickyard Plaza, and the Cottonwood Mall is now part of the City of Holladay. These annexations by cities adjoining Millcreek as well as in other unincorporated areas served as the catalyst to create legislation to protect the unincorporated areas of the County.

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The Utah State Legislature passed House Bill 40 in 1995 that allowed unincorporated communities to form into townships to temporarily protect community borders. This bill was assigned an expiration date of 2010. After several public meetings, the four community councils in the area overwhelmingly recommended the formation of Millcreek Township. The Millcreek Township was created by a vote of the Salt Lake County Council on October 8, 2002. The ordinance creating the Township became effective October 23, 2002, formally giving recognition to an area of unincorporated Salt Lake County that has been shaped by a common heritage stretching over the last 150 years. The Millcreek Township Planning Commission held its first meeting in December 2002. In 2009 the Utah State Legislature passed Senate Bill 73, removing the 2010 expiration date for the townships protections, effectively ensuring continued self-determination to all the County’s townships.

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Service Provision

Utah Code 10-2-413(3)(xiv): the method of providing and the entity that has provided municipal-type services in the past to the area proposed for annexation and the feasibility of the municipal-type services being provided by the proposed annexing municipality;

Many of the current service providers to Olympus Hills will remain the same if Olympus Hills annexes into the City of Holladay. Service providers for police, fire, sewer, roads, electricity, gas, mosquito abatement, water, waste and recycling, libraries, schools and park services will all remain the same. The City of Holladay will provide municipal services such as planning, judicial, business licensing, etc. While the City of Holladay pays for public works services through the general fund, the City contracts with Salt Lake County for general road maintenance. Table 53 shows the current service providers for Olympus Hills and the future service providers if Olympus Hills annexes into the City of Holladay. TABLE 53: PROVISION OF SERVICES Service Current Provision of Services Future Provision of Services Police Unified Police Department Unified Police Department Fire Unified Fire Authority Unified Fire Authority Planning, Judicial, etc. Salt Lake County Municipal Services Holladay City

Water Salt Lake City Public Utilities

Central Utah Water Conservancy District Salt Lake City Public Utilities

Central Utah Water Conservancy District Sewer Mt. Olympus Improvement District Mt. Olympus Improvement District

Waste & Recycling Wasatch Front Waste &

Recycling District Wasatch Front Waste &

Recycling District Roads State Roads – 4500 South State Roads – 4500 South Electricity Rocky Mountain Power Rocky Mountain Power Gas Questar Gas Questar Gas

Mosquito Abatement Salt Lake City Mosquito Abatement

District Salt Lake City Mosquito Abatement

District Libraries Salt Lake County Salt Lake County Schools Granite School District Granite School District Parks Salt Lake County Salt Lake County

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Impact on School Districts

Utah Code 10-2-413(3)(xv): the effect on each school district whose boundaries include part or all of the area proposed for annexation or the proposed annexing municipality.

Both the proposed annexation area and the City of Holladay are in the boundaries for Granite School District. There will be no impact to Granite School District if Olympus Hills annexes into the City of Holladay.

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Appendix A

If annexation occurs, the percent of Holladay City revenues from the proposed annexation area to expenditures from the proposed annexation area is projected to decline from 93.43 percent in 2014 to 81.19 percent in 2019. TABLE A1: PERCENT REVENUES TO EXPENDITURES – HOLLADAY CITY 2014 2015 2016 2017 2018 2019

Total Revenues $1,145,391 $1,151,831 $1,159,321 $1,166,962 $1,174,760 $1,182,721

Total Expenditures $1,225,911 $1,266,812 $1,300,616 $1,350,637 $1,402,677 $1,456,819 Percent Revenues to Expenditures 93.43% 90.92% 89.14% 86.40% 83.75% 81.19%

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